About one kilometer from the Banyan Tree lies a hill whose peaks tower the sky as if it has reached the clouds. The hill has a cave with a diameter of 11 meters looking just like a full moon, hence the name. Viewed from different angles, the cave takes different shapes, just as the moon changes shape with the elapse of time; this is one of the major charms of Yangshuo.

Fuli is a very small town in Yangshuo, with a mere 1,000-strong population. Nearly a third of its people work with traditional Chinese art and crafts, making painted folding fans, framing calligraphy or painting. Most of them get rich by selling these handicrafts to tourists. Former US President Bill Clinton called their fans “natural air-conditioners” when he visited Yangshuo in 1998, bringing unexpected fame as well as cash to the town.